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Book Review: End This Depression Now by Dr. Paul Krugman

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End This Depression Now by Dr. Paul Krugman is an engaging book about the origin of the Great Recession, the present slow growth scenario and a prediction of normalized job growth near the end of this decade.

Dr. Krugman is correct about a number of things. First, demand is sluggish. Unemployment is still too high as evidenced by the one million people who applied for 50,000 new jobs at McDonald’s in April 2011. Unemployment amongst the young and recent college graduates is unacceptably high. The debt of the United States is excessive although it must be judged in relation to the huge size of the economy.

Dr. Krugman believes that the stimulus is still not large enough to do the job of bringing the economy back to full employment. Back in ’08, Warren Buffet pointed to the upcoming year ’14 as the period for clearing out surplus housing inventories so that new construction can begin in earnest.

Despite all of the misery at the lower rung of the economic ladder, Dr. Krugman shows how the top 1% managed to increase their incomes by a factor of five over the previous 50 years. There is heavy criticism in the book of Wall Street excesses which lead to the ’08 crash. These excesses can in part be addressed by requiring margins for derivatives and amending the Uniform Commercial Code to set forth the rights, duties, obligations and recourse of the counterparties to derivative transactions.

A strength of the book is that the author quite correctly pinpoints the things which lead to the current slow growth scenario. The presentation could be supplemented in other areas. For instance, more government stimulus could be provided to small business. In addition, more revenues could be raised with excess consumption taxes on things like junk food which cause medical expenses to balloon in programs like Medicaid.

The top 1% should pay more taxes on excess consumption. The United States consumes a disproportionate amount of the world’s resources, and this imbalance needs to be redirected to achieve economic growth through goods and services that are truly needed.

Although fewer people can afford newer cars and homes, things can be done to change this inequity. For instance micro-cooperatives are blossoming in areas of NYC. These apartments are approximately 250-350 square feet, as opposed to a 500 or more square foot apartment. The miniaturization provides better affordability to wage earners because these living quarters are a fraction of the cost of a traditional apartment.

In addition, the government could put more resources into Section 8 housing instead of encouraging poor people to buy their own homes. Miniaturization could come to auto manufacture by allowing smaller cars to be built like the Tata Motors autos priced at a fraction of the cost of a standard size car. Zoning could be relaxed to allow more manufactured housing to be built–particularly near the coastlines.

Part of the unemployment problem will resolve itself with a wave of baby boomer retirees paving the way for millions of new college graduates and others to be hired. In addition, the government at every level should rebuild infrastructure throughout the United States because the future population in America will be close to a half billion people. This country cannot support such a growing population on the current infrastructure of the ’60s.

End This Depression Now is a call to action to ameliorate longstanding negations in how our economy operates. People need to cut out wasteful consumption, save more and upgrade skills in preparation for the wave of retirements coming, as well as repair the infrastructure for the next half century and beyond.

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About Dr Joseph S Maresca

I've taught approx. 34 sections of collegiate courses including computer applications, college algebra, collegiate statistics, law, accounting, finance and economics. The experience includes service as a Board Director on the CPA Journal and Editor of the CPA Candidates Inc. Newsletter. In college, I worked as a statistics lab assistant. Manhattan College awarded a BS in an allied area of operations research. The program included courses in calculus, ordinary differential equations, probability, statistical inference, linear algebra , the more advanced operations research, price analysis and econometrics. Membership in the Delta Mu Delta National Honor Society was granted together with the degree. My experience includes both private account and industry. In addition, I've worked extensively in the Examinations Division of the AICPA from time to time. Recently, I passed the Engineering in Training Exam which consisted of 9 hours of examination in chemistry, physics, calculus, differential equations, linear algebra, probability/ statistics, fluids, electronics, materials science/structure of matter, mechanics, statics, thermodynamics, computer science, dynamics and a host of minor subject areas like engineering economics. A very small percentage of engineers actually take and pass the EIT exam. The number has hovered at circa 5%. Several decades ago, I passed the CPA examination and obtained another license in Computer Information Systems Auditing. A CISA must have knowledge in the areas of data center review, systems applications, the operating system of the computer, disaster recovery, contingency planning, developmental systems, the standards which govern facility reviews and a host of other areas. An MBA in Accounting with an Advanced Professional Certificate in Computer Applications/ Information Systems , an Advanced Professional Certificate in Finance and an Advanced Professional Certificate in Organizational Design were earned at New York University-Graduate School of Business (Stern ). In December of 2005, an earned PhD in Accounting was granted by the Ross College. The program entrance requires a previous Masters Degree for admittance together with a host of other criteria. The REGISTRAR of Ross College contact is: Tel . US 202-318-4454 FAX [records for Dr. Joseph S. Maresca Box 646 Bronxville NY 10708-3602] The clinical experience included the teaching of approximately 34 sections of college accounting, economics, statistics, college algebra, law, thesis project coursework and the professional grading of approx. 50,000 CPA examination essays with the American Institute of Certified Public Accountants. Additionally, membership is held in the Sigma Beta Delta International Honor Society chartered in 1994. Significant writings include over 10 copyrights in the name of the author (Joseph S. Maresca) and a patent in the earthquake sciences.
  • Dr Joseph S. Maresca

    The last paragraph reads as follows:

    End This Depression by Dr. Paul Krugman is a call to action to ameliorate longstanding negations in how our economy operates. People need to cut out wasteful consumption, save more and upgrade skills in preparation for the wave of retirements coming, as well as the need to repair the infrastructure for the next half century and beyond.

  • Igor

    Joe, are you saying that the book you reviewed made these points: “People need to cut out wasteful consumption, save more and upgrade skills…”? Or are those YOUR personal ideas?

  • Joe

    Mr. Maresca I think you over did it a little bit with all those degrees and certifications. I mean come on was that really necessary? I bet your life was hell during all of that.